The economy is rebounding, and rising consumer confidence is helping drive the economy even higher. For the first time since 2007, credit union lending growth is outpacing share growth, this despite a slowdown in the mortgage market that is causing the credit union industry to refocus its efforts on consumer loans. Like their national peers, Ohio credit unions posted a strong financial performance in 2013 and even exceeded some national trends. For example, loan originations for Ohio credit unions increased 6.7% over 2012. By comparison, the national credit union average was 6.4%.
The Ohio Economy
Ohio’s economy provides a somewhat challenging environment for its local financial cooperatives. Nationwide, one in 1,136 homes received a foreclosure filing during December, according to RealtyTrac. Ohio’s foreclosure figures are higher than average — one in 1,091 received a foreclosure filing during December. Additionally, Ohio’s unemployment rate rose above the national average during the second half of 2013 and was 7.1% as of December. That’s a 40-basis-point increase over December 2012 but a 40-basis-point decline from September 2013.
During 2013, originations at Ohio credit unions increased 6.7% over 2012 to reach $7.6 billion. Consumer loan originations played a key role in this growth and nearly reached $4.6 billion in 2013 — a nearly $326 million increase over 2012. First mortgage originations also increased over 2012 levels and account for 30.8% of the overall origination increase. Ohio credit unions originated $2.5 billion in first mortgages in 2013 — up 6.4%, or $148.2 million, from 2012.
ANNUAL LOAN ORIGINATIONS BY COMPONENT
Data as of December 31, 2013, for Ohio Credit Unions
© Callahan & Associates | www.creditunions.com
Source: Callahan & Associates’ Peer-to-Peer Analytics
The total amount of shares deposited at Ohio credit unions stood at $21.0 billion at the end of 2013, an annual increase of 2.1% or $434 million. Ohio credit union members deposited an additional $100.8 million in their checking accounts during 2013, driving a 3.7% annual increase in share drafts balances. Regular shares and money market accounts also increased over 2012 as members sought liquid instruments for their deposits.
Ohio credit unions added nearly 33,000 net new members over the past 12 months, an increase in membership of 1.2% from the end of 2012. Credit unions in Ohio now serve 2.76 million members. As loans and shares continue to increase in Ohio, so too has the average member relationship, up to $12,917 per member at year-end. This metric, which represents deposits per member plus the total dollar amount of loan balances excluding member business loans, increased 3.3% over December 2012.
As not-for-profit cooperatives, Ohio credit unions are living up their mission of helping members despite the struggling local economic situation.